Featured # Markets | 2 years ago

Federal Reserve Finds Dozens of Cyber Security Breaches

The United States Federal Reserve found over 50 cyber security breaches during the years of 2011 to 2015, several incidents being labeled as “espionage”, all according to official Fed records. The central bank’s staff has suspected hackers as the culprit for a majority of the incidents. The Fed’s computer system plays an important role in global banking. They also hold confidential information on discussions about monetary policy, that drive financial markets worldwide. The cyber security reports, which were obtained by officials through the Freedom of Information Act request, were extremely edited by Fed officials in order to keep the central bank’s security procedures a secret.

“Hacking is a major threat to the stability of the financial system. This data shows why,” said cyber security expert James Lewis, of the Center for Strategic and International Studies, a Washington think tank.

The released records only show a small portion of the cyber attacks on the Fed, due to the fact that they only show cases involving the Washington-based Board of Governors, which is a federal agency subject to public record laws. Officials did not however have access to reports by local cyber security teams, that are at all of the central bank’s 12 privately owned regional branches. The disclosure of these cyber breaches comes while banking is in the limelight, as hackers recently stole $81 million from a Bank Bangladesh account.

Cyber criminals have always targeted large financial institutions worldwide, including U.S. JPMorgan, as well as Ecuador’s Banco del Austro and Vietnam’s Tien Phong Bank. 140 of the 310 reports were labeled as Hacking attempts. In some reports, no incidents were labeled in any way. Eight breaches were classified as “malicious code”, whereas another four were considered acts of “espionage”. In all, the Federal Reserve’s national team of cyber security exports, who operate out of New Jersey, identified 51 cases of true “information disclosure” involving the Fed’s board.

It is currently unclear as to whether the espionage incidents involved foreign governments, which is what people suspect in hacks of federal agencies. For example, in 2014, hackers stole over 21 million background check records from the federal Office of Personnel Management, which the United States blamed the Chinese government for. Beijing denied the accusation. Former employees of the Fed cyber security department say that cyber attacks on the Fed are almost as common as at other large financial institutions.

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